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Information > Financial Terms > This page Negotiable Instruments Law
(Continue) Back to Negotiable Instruments Law (1) The sum payable is a sum certain even though it is to be paid: (a)
with stated interest or by stated installments; or (b)
with stated different rates of interest before and after
default or a specified date; or (c)
with a stated discount or addition if paid before or after
the date fixed for payment; or (d)
with exchange or less exchange, whether at a fixed rate
or at the current rate; or (e)
with costs of collection or an attorney's fee or both upon
default. (2)
Nothing in this section shall validate any term which is otherwise
illegal. (1)
An instrument is payable in money if the medium of exchange in
which it is payable is money at the time the instrument is made.
An instrument payable in "currency" or "current funds" is payable
in money. (2)
A promise or order to pay a sum stated in a foreign currency is
for a sum certain in money and, unless a different medium of payment is
specified in the instrument, may be satisfied by payment of that number
of dollars which the stated foreign currency will purchase at the buying
sight rate for that currency on the day on which the instrument is payable
or, if payable on demand, on the day of demand.
If such an instrument specifies a foreign currency as the medium
of payment, the instrument is payable in that currency. (1)
An instrument is payable at a definite time if by its terms it
is payable: (a)
on or before a stated date or at a fixed period after a
stated date; or (b)
at a fixed period after sight; or (c)
at a definite time subject to any acceleration; or (a)
at a definite time subject to extension at the option of
the holder, or to extension to a further definite time at the option of
the maker or acceptor or automatically upon or after a specified act or
event. (2)
An instrument which by its terms is otherwise payable only upon
an act or event uncertain as to time of occurrence is not payable at a
definite time even though the act or event has occurred. (1)
An instrument is payable to order when by its terms it is with
reasonable certainty, or to him or his order, or when it is conspicuously
designed on its face as "exchange" or the like and names a payee.
It may be payable to the order of: (a)
the maker or drawer; or (b)
the drawer; or (c)
a payee who is not maker, drawer or drawee; or (d)
two or more payees together or in the alternative; or (e)
an estate, trust or fund, in which case it is payable to
the order of the representative of such estate, trust or fund or his successors;
or (f)
an office, or an officer by his title as such in which case
it is payable to the principal, but the incumbent of the office or his
successors may act as if he or they were the holder; or (g)
a partnership or unincorporated association, in which case
it is payable to the partnership or association and may be indorsed or
transferred by any person thereto authorized. (2)
An instrument not payable to order is not made so payable by such
words as "payable upon return of this instrument properly indorse." (3)
An instrument made payable both to order and to bearer is payable
to order unless the bearer words are handwritten or typewritten. Section
3-111. Payable to Bearer. An
instrument is payable to bearer when by its terms it is payable to: (a)
bearer or the order of bearer; or (b)
a specified person or bearer; or (c)
"cash" or the order of "cash," or any other indication which
does not purport to designate a specific payee. (1) The negotiability of an instrument is not affected by: (a)
the omission of a statement or any consideration or of the
place where the instrument is drawn or payable; or (b)
a statement that collateral has been given to secure obligations
either on the instrument or otherwise of an obligor on the instrument
or that in case of default on those obligations the holder may realize
on or dispose of the collateral; or (c) a
promise or power to maintain or protect collateral or to give additional
collateral; or (d) a
term authorizing a confession of judgment on the instrument if it is not
paid when due; or (e) a
term purporting to waive the benefit of any law intended for the advantage
or protection of any obligor; or (f) a
term in a draft providing that the payee by indorsing or cashing it acknowledges
full satisfaction of an obligation of the drawer; or (g) a
statement in a draft drawn in a set of parts (Section 3-801) to the effect
that the order is effective only if no other part has been honored. (2) Nothing in this section shall validate any term which is otherwise illegal.
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